Farm Operations
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Firms Pass Up Tax Breaks Due to Hassles and Costs
The Wall Street Journal published a front page article (you may need to be a subscriber to read the full article) today on how many small and large businesses are passing up the chance to take advantage of certain tax benefits due to the hassles and costs associated with IRS compliance. We have seen many […]
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Plan for 2012 Crop Insurance Proceeds
Based on this year’s drought, we know that this will most likely be the largest amount of crop insurance claims ever processed. With proper planning, you may be able to structure when to report these crop insurance proceeds to achieve the best tax advantage for this year. Crop insurance proceeds due to crop damage (not […]
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Medicare Premiums Qualify Are Deductible Above the Line (in some cases)
The IRS just announced a formal change in the long-held position on the deductibility of Medicare premiums (normally withheld from Social Security Benefits). Until about 2009, the IRS position was that a self-employed taxpayer (including partners and more than 2% S corporation shareholders) could not deduct Medicare premiums above the “line” as part of the […]
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How to Pick a Futures Broker!
In response to the bankruptcy filing of Peregrine Financial Group this week and the MF Global filing last year, these are some of red flags to watch out for in picking a broker (or continuing) to handle your futures trading and hedging: Review the financial information that is available regarding the financial health of the […]
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Don’t Forget About 2013 – 2015 crops
With the weather market rally of recent weeks, we sometimes forget that these rallies also raise prices for the next couple of crop years. This rise, in many cases, can provide a chance to lock in profits for those crop years that may not materialize if you wait until the actual crop year arrives. As the […]
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Watch Out For Your S Corporation Debt Basis
Many farmers will have their active farm operation contained within a corporation and in many cases, this corporation is taxed as an S corporation. If the S corporation has a loss, this loss can be deducted on the shareholder’s tax return, but only to the extent of the shareholder’s basis. This basis is comprised of […]
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Take Advantage of State Programs
Our blog tends to focus on the federal issues regarding income taxes. Sometimes we forget that state sales, income and other taxes may end up costing the farmer more than federal income taxes. For example, in Washington state, we do not have an income tax, but we do have sales, property and a business and occupation […]
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1 AGI instead of 3 AGI
For farmers who are enrolled in ag programs with the FSA, there are currently three different levels of AGI (adjusted gross income) that affect whether they qualify to receive any payments from the FSA during the year. These levels are: $500,000 of non-farm income $750,000 of farm income $1,000,000 of non-farm income, but OK if […]
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Medicare Surtax Is Coming on January 1, 2013
Beginning January 1, 2013, there is a new Medicare Surtax on wages and self-employment income in excess of $200,000/$250,000 (married couples). This surtax is comprised of a .9% rate which added to the current total Medicare tax rate of 2.9% equals a new combined rate of 3.8% Additionally, if you have certain types of investment […]
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Nothing Better!
Yesterday I spent the afternoon traveling from Minneapolis to Sioux Falls. There is nothing better (maybe driving/running/operating a combine in the fall is better) than driving this great country looking at crops. The crops look good from the road terse here has been some weather stress. Several areas in Minnesota showed hail and excessive rain damage […]